Founded in 2004 by former Netscape chief Marc Andreessen, social-networking-platform-for-all provider Ning announced late lat week that not only are they squashing the “free” feature, but as a result, are reducing staff from 167 down to 98, or 40%.

While there are a number of factors driving the decision, Ning spotlights misuse of it’s services, mainly spam and pr0n, as the primary factor. What this means to current Ning users, all 2.3 million of them, is that they’ll either have to cough up a fee, or move their social network elsewhere. How much? Well, that depends on how much of Ning’s attention each user wants. The highest figure seeing the light of day is $100/month, the lowest $5. Based on a tiered strategy, users that lay out anywhere between $10 and $100/month will have faster access to Ning’s support staff. $5/month will grab you a custom domain name, while $10/month will nab some extra storage and bandwidth. Moving up the monetary scale, $25 will remove Ning’s advertising (with the option to insert their own). For the same fee, users can also remove Ning’s promotional messages encouraging others to create their own social network(s).

When viewed in this light, the changes that Ning plans on making aren’t really that steep. However, as with all businesses, Ning owes it to their investors, all reported $120 million, to return a profit. While there’s been no official, and most probably won’t be, recognition of this factor, my guess is that this pressure can certainly be felt amongst Ning execs. As Ning CEO Jason Rosenthal put it in a company wide email last week:

“Our premium Ning networks like Friends or Enemies, Linkin Park, Shred or Die, Pickens Plan, and tens of thousands of others … drive 75 percent of our monthly U.S. traffic, an those network creators need and will pay for many more services and features from us.”

In regards to the staff reduction, Rosenthal says, “We are going to change our strategy to devote 100 percent of our resources to building the winning product to capture this big opportunity. We will phase out our free service. Existing free networks will have the opportunity to either convert to paying for premium services, or transition off of Ning.”

The service itself is a great idea, and considering that Ning is now going to start asking it’s users to pay up or move out, this could be the window of opportunity another startup could be looking for. Let’s just hope they don’t take the $120 million and are then under the gun to pay it back.

As a veteran of the first .com bubble, my only thoughts here are: Tripod anyone? Oh, and did I mention that Ning CEO Jason Rosenthal has been in this position just over a month? Former CEO and co-founder Gina Bianchini stepped down (a nice way of saying “get me off this sinking ship”) last month and was replaced by Mr. Rosenthal, who had previously been serving as the company’s COO.

Again, while these pricing points are nothing to knock anyone off their chair, the harder battle for Ning to fight right now is the response to their, “Hey it was free, but we’re not making enough dough, so pay up b@(*es, or get out.”